Sunday, October 7, 2012

Philippines Signs Peace Agreement With Rebels

Economic Growth

An article in Bloomberg says that Philippine President Benigno Aquino has announced that it has signed a peace deal with Islamic rebels, the Moro Islamic Liberation Front, thus giving them an autonomous region:
A new “political entity” called “Bangsamoro” will take the place of the autonomous region in Mindanao, Aquino said in Manila today. Talks between Philippine officials and the Moro Islamic Liberation Front concluded in the Malaysian capital of Kuala Lumpur, and Aquino and Malay Prime Minister Najib Razak will witness the signing of the agreement in Manila on Oct. 15.
“This framework agreement paves the way for a final, enduring peace in Mindanao,” Aquino said, flanked by his entire cabinet. “This means that hands that once held rifles will be put to use tilling land, selling produce, manning work stations, and opening doorways of opportunity for other citizens.”
While economic growth in the Philippines is accelerating, the insurgency has frustrated efforts by companies including Xstrata Plc. and Sumitomo Metal Mining Co. to tap an estimated $312 billion in mineral deposits in the south, and damaged Aquino’s efforts to further boost foreign investment. Death squads that human-rights groups have linked to police and the military, contract killings over land disputes, and al-Qaeda- affiliated terrorists in Mindanao add to the mix of violence as the nation pursues its first investment-grade credit rating.
This is a bold move by the President Aquino, but it might be a necessary one to better its fortunes. The decades-long insurgency by the rebels has claimed 100,000 lives and has made investment in the Philippines less attractive.  The World Economic Forum in its latest survey has ranked the island nation 126th of 144 on the cost to business due to terrorism.

As the article points out, peace tends to bring with it dividends: “It could help sustain the rally in the stock market,” Astro del Castillo, managing director at First Grade Finance Inc., said by phone from Manila today. “It’s one of the islands that’s really underdeveloped. If there is peace, investments will pour in and push the economy of the country higher.”

You can read the rest of the article at [Bloomberg]